Is everything negotiable?

Is everything negotiable?
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The propositions that Handshake is built upon seem quite simple in principle (see Duncan White’s “What is Handshake” post? ):

1: information is valuable
2: there are people who have information, such as their personal data, and there are people who want that information, such as advertisers, analysts and businesses of all kinds
3: both people can benefit if they can work out a mutually acceptable exchange: if you give me x then I will give you (this bit of) my personal data

However, a problem is that the value of any given bit of data isn’t obvious, and it’s also likely to be variable: some kinds of data belonging to some kinds of people are likely to be more valuable than other data, and also people’s willingness to provide their data will vary, and so therefore will what they expect in exchange. Handshake proposes that the best way of determining the value of any given piece of data is to allow the “seller” and the “buyer” to negotiate. By creating a mechanism that allows one person to make an offer “I want this kind of data, and I’m prepared to give this kind of reward in exchange for it” and allowing other people to not only respond by saying “yes” or “no” (or “no” by default, by not responding at all), but also to respond with a counter-offer: “I’m prepared to give you that kind of data, but I’m looking for this kind of reward in exchange for it”. That in turn can lead to a counter-counter-offer, and so on until either a mutually satisfactory exchange is discovered and agreed, or the negotiators realise that they cannot discover a mutually agreeable exchange, and the process of negotiation ends.

As with much of the internet, the problem is that once this principle is recognised and accepted, then adoption happens on a massive scale. But again, as with much of the internet, the solution lies within the internet itself. Unlike all previous human communication systems, from clay tablets to telephone calls, the internet is an intelligent communication system. That is, the internet can not only transmit messages (the offers and counter-offers) but it can also analyse and process them. The internet can combine algorithms (“frozen intelligence”) and computing power to allow the buyer of information to manage negotiations at scale, generating customised responses to counter-offers which take into account not only what the counter-offer is, but also who is making that counter-offer, what other counter-offers are being received, and how many negotiations have already been successfully concluded.

As we noted at the beginning of this post, information is valuable, and the potential sellers of information also need information in order to maximise their ability to negotiate successfully. This information comes from feedback about what is happening in the market: what other people are offering, what negotiations have been concluded, and at what terms. Taken together, these multiple negotiations create a market for information, where fair prices can be negotiated for the information that people want to buy and others are prepared to provide. The internet not only provides the problem of scale, it also provides the solution, in the form of “algorithmic trading” and the collection and dissemination of information to the market players so as to maximise the efficiency of the market.

But there’s another kind of scale involved in these negotiations. As an individual provider of information I’m unlikely to have the time or inclination to negotiate intensively with every potential buyer of information. Instead, there are some broad rules I will probably want to apply that can filter the number and intensity of the negotiations I’m going to get involved in. For instance, there may be a number of areas which I’ve decided I don’t want to provide information, no matter what I might be offered in exchange. For instance I might decide that no matter who asks, and what inducements they might offer, I’m not willing to trade my personal medical information, details about particular relationships, or some kinds of financial information. Similarly, there might be particular organisations that I might decide I would never provide information to, or periods of time when I wouldn’t want to be bothered to either negotiate or provide information. Thanks to the intelligence that we can build into the internet, in the form of apps, we can configure our software to know these things and negotiate on our behalf.

Perhaps best of all, we can vary how intensively we engage in the negotiation process. When we first start negotiating, we will probably want to think about each step in the process, and be fully in control of the offers and counter-offers are that we make. As we become more familiar with the process of negotiation, and with the way the information market works, we will be able to manage that complex and skilled task with less conscious attention and effort, and are able to operate in a semi-automatic fashion. In terms of our software, this means configuring the app so that we can set limits ahead of time on what offers can be rejected or accepted, and what kinds of counter-offers we would make. Instead of doing this “hands-on” we can configure our software to set these decisions up, tell us what they are, and simply get our approval to send them to the person we’re negotiating with (or allow us to tweak them if we’re not entirely happy). As our familiarity with negotiation in general increases, and with specific negotiators and information requests in particular, then we can again configure our software to act on our behalf, only alerting us if the sequence of offers and counter-offers falls outside certain limits.

One of the beauties of the ability to provide machine intelligence to assist both the buyers and sellers of information is that it makes it possible, and worthwhile, for micro-trading to take place. In just the same way as the internet has enabled businesses to exist and thrive whilst trading things for very small amounts (audio books and music tracks for instance) because the overheads of both delivery and accounting are minimised, then automating and scaling the process of negotiation allows micro-information to be exchanged for micro-payments. As Pierre Omidyar, the founder of eBay discovered, the basis of a market is to put someone who wants to sell something, no matter how bizarre, in contact with someone who wants that object, and to let them agree a price. In eBay’s case it was somebody wanting to sell a broken laser pointer, and Omidyar knew he had created the perfect market when a collector of broken laser pointers agreed to pay $14.83 for it. The basis of today’s excitement about Big Data is that the ability to collate (and analyse) lots of data from lots of people makes all of that data more valuable. It is the ability to scale the multitude of negotiations needed to gather that data from hundreds, thousands of equitable exchanges that makes a market for the fair trade of information possible.